NIB, Enron and the Banana Republic

There can only be two reasons for this, either the person involved is incompetent and therefore should lose his job or it was a deliberate act and therefore he will be prosecuted.

This was the angry reaction of a federal investigator after it was revealed that some documents had been shredded by an employee of Arthur Andersen, the accountancy firm for Enron. The Enron corruption was discovered in December 2001. A mere six months later Arthur Andersen was found guilty in a court of law of the shredding charge. Subsequently, Arthur Andersen was totally destroyed because of its involvement with the Enron scandal.

Less than two years after the corruption was discovered Andrew Fastow, a financial officer with Enron was sentenced to ten years in jail, the maximum possible, for his part in the scandal. Several others have subsequently been jailed and the investigation is still strong and ongoing. Keep these facts in mind as you read the rest of this article.

In 1998, the High Court appointed two investigators to look into certain activities at National Irish Bank. Five years later they complete a draft report but cannot make it final because they have made ‘adverse comments’ about some NIB personnel. The draft report is sent to NIB so that these people can read what has been said about them and consider whether it’s appropriate or not.

(A little diversion here – The Gardai bust a major drugs operation and compile a report for the DPP. Before actually sending it to the DPP, they post it off to the drugs gang to see if they are happy with their conclusions, the gang peruse the document, make some changes and return it to the Gardai)

It took nearly a year for NIB to consider the draft report, so, six years after the start of the enquiry we have a report. OK, let’s have prosecutions? Sorry, that could prove very difficult as evidence gathered for the report cannot be used as it was given voluntarily. Figure that one out.

Hang on, I’m having a flashback here, yes, Mary Harney, when asked earlier this month why the investigating officer disagreed with her decision to axe the enquiry into companies associated with the Ansbacher corruption replied

Unfortunately, it’s a criminal offence for me or anyone else to reveal anything that comes to light during these enquiries.

(Who makes all these very convenient laws?)

Anyway, let’s bring things up to date. It is reported in today’s Irish Times that the Office of the Director of Corporate Enforcement (ODCE) is in the High Court in an attempt to force the NIB investigators to reveal the names of those who made up NIB’s board audit committee.

What’s going on here? Seven years after the start of the investigation and seventeen years after the criminality at NIB began, a so-called State regulatory body, ODCE has to go to the High Court to force investigators, who were appointed by the High Court, to reveal the names/addresses of some of the people responsible for the criminality. Apparently, according to the investigators, there are points of principle involved in the request for such information. Principles? If so, it will be a first in the Irish corporate world.

Well, you might say, at least ODCE may take prosecutions? No, ODCE is only interested in considering disqualification proceedings against those involved in this major criminality. This means they will be barred from holding directorships, believe me folks, nobody takes this so-called punishment seriously. (By the way ODCE secured TWO prosecutions in 2004 for company law offences, expenditure for the authority was €3.07 million)

Revenue is also considering charges for tax evasion and the DPP is considering charges for fraud. (Please, please, don’t hold your breath).

So, Enron, less than two years after the crime and people are slopping out, NIB, seven years after the investigation began and six months after the bank was found guilty of widespread criminality, we still don’t even know the names of those responsible. Welcome to the (Banana) Republic of Ireland.

Across the board I fail to understand why some cases take so long to get to court, and then when they do, they get deferred again, and sentencing is ages after the guilty verdicts. I don’t see the sense in it at all. It’s not unique to company law infractions and fraud cases.

I have long believed the primary purpose of the various tribunals and enquiries is not to find the truth, but to create an illusion of decisive action and to generate sufficient publicity and media coverage to ensure that prosecutions could not succeed because of the impossibility of ensuring a fair trial

However, I’ve long believed that Tribunals and enquiries are the courts of the rich. Why do we need enquiries? Just gather the evidence, issue proceedings and let justice be served.

As for Mr. Appleby, the Director of Corporate Enforcement, his office is a toothless dog. If you ask me his office should be given the same powers as CAB. Maybe then weâ€™d see some real justice for corporate scandals.

I have to agree with Daberries. This system is a joke. It’s not so long ago that white collar crime wasn’t taken seriously in the US, either. But what’s interesting about the Irish case is that there seems to be minimal public outrage like Anthony’s.